Spotlight on ALDI

ALDI is a leading worldwide discount supermarket chain based in Germany known for its small store format and selling a limited assortment of private-label products at heavily discounted prices. Brothers Karl and Theo Albrecht opened the first store in 1954 and by 1960 had built the brand into a chain of 300. Today it is one of the world’s largest privately-held companies with almost 10,000 stores in 18 countries. It is split into two separate operating companies ALDI Nord and ALDI Süd. In the United States ALDI Nord operates the specialty grocery chain Trader Joe’s and ALDI Süd operates under the ALDI name.

A key part of the company business model is to offer a limited product range of about 1,400 items per store, far below the over 30,000 items offered by a typical supermarket. This allows them to focus on products in which its customer base is especially interested. While the company used to only provide a bare-bones shopping experience, ALDI has evolved into a grocery store that combines contemporary design with on-trend merchandise, using its carefully crafted discount model to its advantage. Customers can buy almost everything they need at ALDI, from fresh produce and meat to wine and beer to even a selection of home goods. Now, shopping at ALDI is an experience, and its discounted selection is not just for the budget-conscious customer.

ALDI is in the midst of an aggressive U.S. expansion. In 2015 the company announced plans to spend $3 billion to enter the California market with 45 stores by the end of 2016 and to open 650 new stores nationwide by the end of 2018. This will give ALDI over 2,000 stores in 33 states, approximately 44% of its main discount competitor Wal-Mart’s U.S. store count. ALDI is ranked 7th in the world by sales volume among food-retailers according to a report by consulting firm Planet Retail, and though it does not regularly report sales revenues it did reveal a $6.8 billion sales revenue figure in 2010, which has presumptively continued to increase due to continued world-wide expansion.

ALDI retail spaces are typically comprised of approximately 18,000 square feet on 2.5+ acre sites that ALDI typically purchases or develops. The retailer prefers to be near a signalized or full access intersection within 3 miles of a dense trade area population and the daily traffic count must be in excess of 20,000 vehicles per day. Leases for ALDI retail locations are typically NNN Ground Leases with a 20-year term and rent escalations every 5 years.